Ballmer Sees Google, Open Source as Strongest Competitors

Microsoft's CEO says the company faces many competitors across different parts of its business, citing open-source and advertising business models as two big phenomena.

SANTA CLARAAlternative business models, like that of Linux and open source and Google's advertising model, pose the greatest competitive challenge to Microsoft, CEO Steve Ballmer said May 11.

Addressing an audience of several hundred members at an event jointly hosted here by the Churchill Club and the Commonwealth Club, Ballmer said the Redmond, Wash.-based software giant faces many competitors across the many different parts of its business.

But there are two big phenomena going on: the new open-source and advertising business models.

Open source is more about whether that is a business model that delivers superior innovation than a commercial company can deliver.

"So, there is competition with this new business model; there was also competition with the new advertising business model [embraced by Yahoo and Google]," he said.

While Microsoft can't embrace the open-source business model, it has embraced the new advertising one and wants to grow to the No. 1 market position in that space from its current No. 3 spot.